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Newmont Corporation (NEM)
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Barrick Gold Corporation (ABX)
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Westgold Resources Limited Ordinary shares (WGX)
Q: Hi there, thanks for your answer regarding WGX. Follow up;
Are the shares currently trading at a fair price, cheap, etc? Can you provide ratios to support your views?
Your thoughts on not hedging at this point?
Your thoughts on current management/board?
Could WGX be a takeover target itself here?
Any two/three company ideas as to who would benefit taking them over?
Is the momentum for gold strong enough to break through $3K? Or could it fall sharply next week based on the US election results, your thoughts would be appreciated?
Thanks!
Are the shares currently trading at a fair price, cheap, etc? Can you provide ratios to support your views?
Your thoughts on not hedging at this point?
Your thoughts on current management/board?
Could WGX be a takeover target itself here?
Any two/three company ideas as to who would benefit taking them over?
Is the momentum for gold strong enough to break through $3K? Or could it fall sharply next week based on the US election results, your thoughts would be appreciated?
Thanks!
5i Research Answer:
WGX is currently 8X earnings, which is very cheap for the gold sector, and peers are trading at an average 18X. We do not like gold hedging. It typically results in a lower valuation and of course can cap gains when gold moves. When companies are leveraged it is often mandated, but we don't like it as a general rule. When a company is heavily levered or has just done an acquisition it can make some sense. We think management is fairly solid overall. Certainly they have grown the company nicely and fairly consistently, while keeping the risks they can control at a minimum. Control is in the market and we would see WGX as a reasonable target in and of itself. NEM or ABX would probably be interested at the right price.